Venture capitalists have made record profits on their investment in Skype, the Luxembourg-based internet telephone group bought by eBay, the US online auction company, for $4.1bn (â¬3.3bn) last week.

Bill Draper, a partner at Draper Richards, the San Francisco-based venture firm, told Financial News last week: “This was the best return I’ve ever had.” Draper and his partner Howard Hartenbaum were the first outside investors in Skype and personally invested about $250,000 in 2002 for a 5% stake. The report said Skype was then valued at less than $2m, giving them nearly a thousandfold return.

Skype allows people to make free, unlimited telephone calls anywhere in the world. It generated revenues of $7m last year, which it expects to grow to more than $200m next year.

Bessemer Venture said it made a 100-times return on Skype. Robert Stavis, a general partner at Bessemer, said: “We spent a number of weeks relentlessly pursuing this team, flying to Europe, begging them to take some capital from us and we eventually prevailed on them to do so.” Stavis did not return phone calls.

Draper Fisher Jurvetson recently made more than 50 times the value of its investment in Baidu.com, a Chinese rival to Google that floated on Nasdaq last month. Draper Fisher did not sell its 25% Baidu stake at the initial public offering when the shares jumped from the $27 issue price to $122.50 on their first day of trading.

Last week, Baidu shares lost nearly a third of their value and dropped to $81.32 when analysts at Goldman Sachs, one of the bookrunners of the IPO alongside Credit Suisse First Boston, started coverage of the company with an underweight rating. Goldman Sachs said the fair value of the stock was between $27 and $45.